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Henry M. Robert

What are the challenges Ukraine is approaching the new economic crisis with?

The experts have studied the life in the regions and suggested development models
27 September, 2011 - 00:00
FEELING SAD / Photo by Ruslan KANIUKA, The Day

Ukraine has gone through two difficult years when everybody started talking about the economic crisis and felt it. The International Center for Long-Term Studies has recently carried out a thorough research of the life quality in our regions: what has changed and where, what are the tendencies, what are advantages and disadvantages of the Ukrainians’ life. The experts have assessed five living standard aspects: well-being, health care, education, society and environment.

These are some of their conclusions. Thus, the people in the eastern regions earn more money than in other regions, however, they cannot ensure the high living standard. These regions have problems with crime rate, the highest level of serious illnesses and the unsatisfactory ecology. Instead, in the regions where the official income level is lower than in the east, the security is much higher. Thus, Lviv, Ternopil, and Ivano-Frankivsk oblasts are the safest regions of our country (the rate of murders there is one of the lowest in the country: 9 to 11 cases per year per 100,000 people). In Kyiv oblast this rate is three times higher: 30 murderers per 100,000 people. Another example is Zaporizhia oblast. This region is the fourth in Ukraine for its income level but it is an absolute record-holder for the number of larcenies per 1,000 people.

Kyiv is the leader of the living standard rating and has taken first places in several categories (beautification, health care and education quality). Kyiv, for instance, has the highest number of doctors: 84 per 10,000 people whereas in Kherson region there are only 35.5 doctors. According to the information received, the most educated people live in Kyiv. Here every hundredth person has the academic degree. Kirovohrad and Zhytomyr oblasts have the lowest concentration of people having the academic degree. In general, Kyiv, Sevastopol, Lviv and Ternopil oblasts are among the top-five regions for the life quality.

The western regions that are traditionally considered the poorest are in the upper part of the life quality rating. The under-developed industry of those regions is compensated by the good ecology and higher social life standards and orientation to the European values. The expert of the International Center for Long-Term Studies Maksym BORODA told The Day about the research in more details.

Relying on the results of your studies one can come up with a conclusion that during the period of crisis the living standard has improved in western Ukraine and has worsen in the industrial regions. Is it connected with the industry decline in the East and the significant inflow of labor migrants’ money in the West?

“We are not saying that the living standard has improved in the West. We are talking about the correlation change. Thus, the life quality in the western regions has improved as compared to the eastern ones. The reason for this is that during the crisis the eastern regions have lost their advantages of higher economic development and higher people’s incomes. Actually, it partially compensated the problems they have always had (health care, environmental and social problems). The eastern regions had certain advantages before the crisis but the crisis has reduced them. Of course, the eastern oblasts remain better economically developed and wealthier. Meanwhile, the advantages of the western regions remain the same (the traditional society and the level of education and environment). I remind you that we have assessed five aspects: well-being, health care, education, society and environment relying on the data bases of the World Bank, UNO, WHO and other organizations.”

According to one of your conclusions, there is no relation between the life quality and urbanization in Ukraine. Has it always been so or is it a recent tendency?

“There has been no dramatic change in the Ukrainian society before the crisis and after it. So, we can concede that it is rather a tendency than a recent event. There is information that the urbanization does not influence the life quality since we can see that there are less urbanized regions where the life quality indicators are better than the ones in the urbanized regions. For example, Donetsk and Luhansk oblasts have been at the end of the rating since 2009 though they are highly urbanized. Instead, Kharkiv oblast is also urbanized but it has always been at the beginning of the rating. Lviv or Ternopil oblasts have remained the leaders they were before the crisis. Meanwhile, they are much less urbanized.”

The information about the level of well-being in the western regions is not very trustworthy since people have hidden incomes from their labor migrant relatives. Do you take it into account?

“We have made the rating according to the official statistics and if we did not have it we used the surveys. The official statistics show the ‘legal’ information. Ninety percent of labor migrants’ incomes are hidden. If you go to western Ukraine and see how people live there you will notice at once that their wellbeing does not correspond with the economic indicators recorded by the official statistics. The factor of labor migrants’ incomes is significant in western Ukraine. By the way, the official statistics about Kyiv are not always trustworthy. For example, we have the information that the nominal number of Kyiv residents is 2.7 million. In reality there are about 5 million people living there. It means that the official information about GDP or the number of doctors per person do not square with reality.”

You state that the weak point of the rating leaders Kyiv and Sevastopol is the society “typical for any urbanized regions.” Do you mean the security level or the level of social organization?

“It depends. If we take five aspects, the leaders have better results for the well-being, environment, health care and education. The social development is worse. The society was assessed with two main criteria. The first one was security comprising the crime and murder rates. The second one was the social inequality (financial inequality and gender incomes inequality: how much more the men earn). These indicators have shown that higher crime rate is typical for highly developed regions as compared to the regions where the rural population prevail. People living in large economically developed regions have higher incomes and higher inequality. That is why in the villages where people earn less or nearly the same the social inequality is a bit lower.”

Kyiv seems to be a certain “state within a state” in all the aspects, doesn’t it?

“In fact, Kyiv is in a condition of possibilities. Now Kyiv can hardly repeat the economical miracle that happened at the end of the 1990s and the beginning of the 2000s when there was an economic boom here whereas other regions only started developing. First of all, Kyiv has very good results of the input resource indicators: GDP, the number of doctors per person and the percent of people using the Internet. However, the resources efficiency is not significantly higher than all over Ukraine. It means that Kyiv has the potential of some resources (intellectual, demographic, etc.) but they are being used inefficiently so far. It disproves the idea that Kyiv is a state within a state. Vice versa, it reminds of other Ukrainian cities more and more.”

If we speak about further development of the regions, is the model of sustainable development currently promoted and used in the US and Europe popular in Ukraine?

“The model of sustainable development, intensive and extensive development models are our attempts to interpret the results we have received. In our opinion, only three regions realize and not just declare the model of sustainable development. These are the cities of Kyiv and Sevastopol, and Kharkiv oblast. These regions are economically developed; they have higher level of education, better health care, relatively normal society and environment. These results are relative as for the other regions. Other industrial regions are, in our opinion, closer to the intensive development model since the economic sector is intensively developing there and the well-being level is higher; some of these regions can boast of better educational indicators but all of them have environmental problems leading to the health care problems; there are some problems in the society, too. The situation is different in the agrarian regions. These are the western regions and central Ukraine. They have good economic indicators, better environment and better social results. It is especially characteristic for the western regions: the society is more traditional there, they have the idea of community and social capital; all of this decreases the crime rate and the economic inequality. The lower level of the economic development means: smaller amount of money leads to fewer problems, lower inequality and lower crime rate. That is why we have attributed the agrarian regions to the extensive model, so to say.

“The conclusion is the following: all the groups of regions have various challenges. The question of model of sustainable development preservation and use of their resources is topical for Kyiv, to a lesser extent, for Sevastopol and Kharkiv region. The common problem of this model is what I have mentioned about Kyiv: the input indicators are much better than the output indicators. That is why the challenge for these regions is the increase of the effectiveness of all the social resources: economic, demographic, intellectual ones, etc. The goal is to demonstrate better results: lower children’s mortality or lower crime rate. The challenge, the way, and the prospect for the regions we have attributed to the intensive development model is using their higher economic development and better economic resources to aim their efforts at improving the situation with other life quality components such as social services quality, public security and the environmental protection. If they manage to do it, they will shape the model of sustainable development that is the most efficient to ensure the high life quality. The task for the extensively developing regions is to improve the areas they are lagging behind in: primarily, the economic development and well-being. We, probably, should not speak about industrialization, but the development of the services sector, tourism and agriculture is the way to improve the well-being and economic indicators without losing the advantages they have now: safe environment, healthier population and better society. Thus, the western oblasts can join the model of sustainable development decreasing the regional imbalances that exist in Ukraine with the heterogeneous development level.”

By Oksana MYKOLIUK, The Day
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